Japan's economy may finally be bouncing back. Figures released yesterday show that machinery orders jumped 4.2% in January as compared with December orders. According to the Wall Street Journal, the increase was higher than expected and the result of a higher-than-expected 7.2% rise in demand from manufacturers.

Analysts now have high hopes for the Japanese market, which has been at a near standstill. "There's a real chance that Japanese stocks will be the world's best performer," Kazuhiro Miyake, Daiwa Securities Capital Markets' chief strategist told Bloomberg. "Investors are rediscovering Japan. Even with the yen appreciating very sharply, you're seeing earnings increase by a large margin."

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In Tokyo trading Fujikura, a maker of optical transmission systems and a variety of cables, jumped 3.5% and IHI, which makes heavy machinery, nuclear power plants and rocket propulsion systems, gained 1.9%. Kawasaki Heavy Industries, a maker of heavy equipment from turbines and submarine engines to ships and train cars, shot up 1.8%, and industrial robot maker Fanuc advanced 0.6%.

IT equipment companies were on the rise with Yokogawa Electric surging 5.6% and Sumco, which makes silicon wafers used for solar batteries and semiconductor equipment climbing 2.7%. NTT Data soared 2.2% and Tokyo Electron advanced 1%.

Battered Airlines Rebound as Oil Prices Stabilize

In Hong Kong easing oil prices bolstered the airline sector, recently reeling from the anticipated effects of sky-high oil prices. Cathay Pacific soared 4.5%. The company is reporting a tripling of net income in the last year and the company now plans to buy 25 new planes, which travelers hope will be decked out with more comfortable seats than the last round.

Passengers who frequently fly between Hong Kong and London report that Cathay's most recent seat updates with a sliding seat base have been a disaster. And this extends to the usually top-notch business class as well, where the herringbone pattern of the seats leaves customers feeling claustrophobic and trapped. But the airline has creatively tapped into key customer bases like offering sweet deals on bundles of flights to Hong Kong families with children attending boarding school abroad.

There was good news for Hong Kong-listed Air China, which advanced 1.1%, but other airlines declined. China Southern Airlines fell 1.3% and China Eastern Airlines lost 0.9%.

Top performers on Shanghai's big board included ship-building company China CSSC, which rallied 6%, and Offshore Oil Engineering, which shot up 6.6% thanks to parent Cnooc's plans to sink more cash into deep-water oil exploration in China and into various overseas projects.